NEWS RELEASE Contact: Sheila G. Spagnolo Vice President, Tax & Investor Relations Phone (610) 2511000 sspagnolo@triumphgroup.com TRIUMPH GROUP REPORTS THIRD QUARTER FISCAL 2015 EARNINGS Net sales for third quarter fiscal year 2015 increased to $917.4 million Operating loss for third quarter fiscal year 2015 was ($61.3) million and included a pretax charge of $152.0 million for forward losses associated with the 7478 program through the duration of the contract Net loss per share for third quarter fiscal year 2015 was ($0.79), which included certain items described below totaling ($2.20) per diluted share. Excluding these items, net income was $72.1 million and earnings per share were $1.42 per diluted share Yeartodate cash flow from operations before pension contributions of $55.9 million was $365.9 million Successfully completed agreement to assume production of Gulfstream G650 and G280 wing programs BERWYN, Pa. January 28, 2015 Triumph Group, Inc. (NYSE: TGI) today reported financial results for its third quarter of fiscal year 2015, which ended December 31, 2014. During the third quarter, we continued to extend Triumph s core capabilities in complex aerostructures with the assumption of the Gulfstream G650 and G280 wing programs and we are pleased with the progress of the transition to date, said Jeffry D. Frisby, Triumph s President and Chief Executive Officer. In addition, our Aerospace Systems Group and Aftermarket Services Group continued to perform well, delivering positive organic revenue growth and sustaining their strong operating margins. We generated strong cash flow during the quarter, enabling us to reduce our debt and opportunistically buy back shares to return capital to our shareholders and we remain focused on driving value through enhanced execution, identifying efficiencies and pursuing strategic growth opportunities.
Following Boeing s recent 7478 rate cut announcement, we conducted an indepth review of our assumptions for the program through the end of the contract and recorded a onetime charge in the fiscal third quarter to account for forward losses. The charges are a prudent measure that considers, among other factors, lower expected build rates as well as higher actual and forecasted costs than originally targeted for the duration of our contract. Notwithstanding this decision, we will continue to take actions to reduce costs and enhance performance on the 7478 program. Net sales for the fiscal third quarter of 2015 were $917.4 million, up from fiscal third quarter 2014 net sales of $915.8 million. Organic sales for the quarter decreased seven percent primarily due to decreased production on the C17 program and lower nonrecurring revenue. Net loss for the third quarter of fiscal year 2015 was ($39.8) million, or ($0.79) per share, compared to $35.4 million, or $0.67 per diluted share, for the third quarter of the prior fiscal year. Results in the third quarter of fiscal year 2015 included charges in the Aerostructures segment of $169.2 million pretax, or ($2.16) per diluted share, as detailed in the segment results discussion below. The majority of these costs were related to a forward loss charge of $152.0 million pretax, or ($1.94) per diluted share, associated with the 7478 program to cover the duration of the contract. In addition, operating results for the quarter included $3.5 million pretax, or ($0.04) per diluted share, of transaction fees related to the assumption of the Gulfstream G650 and G280 wing programs. Excluding these items, earnings per share for the third quarter of fiscal year 2015 were $1.42 per diluted share. Excluding nonrecurring items, earnings per share for the prior fiscal year s third quarter were $0.99 per diluted share. The number of shares used in computing diluted earnings per share on an adjusted basis for the quarter was 50.8 million shares. Net sales for the first nine months of fiscal year 2015 were $2.808 billion, down slightly from net sales of $2.827 billion for the comparable period of the last fiscal year. Net income for the nine months of fiscal year 2015 was $155.9 million, or $3.04 per diluted share, versus $164.0 million, or $3.11 per diluted share, in the prior year period. In addition to the third quarter charges totaling $172.7 million pretax described above, the yeartodate results included the first two quarters of fiscal year 2015 costs related to the Red Oak facility transition, the refinancing of the Senior Notes due 2018 and a gain, net of legal fees, related to the settlement of the Eaton litigation. Excluding these items, net income for the first nine months of fiscal year 2015 was $206.6 million, or $4.02 per diluted share. During the nine months ended December 31, 2014, the company generated $365.9 million of cash flow from operations before pension contributions of $55.9 million; after these contributions, cash flow from operations was $310.0 million. During the quarter, the company repurchased 336,271 shares of stock under the company s existing 5.5 million share repurchase authorization. As of December 31, 2014, approximately 3.5 million shares remained under the share repurchase authorization.
Segment Results Aerostructures The Aerostructures segment reported net sales of $559.5 million in the third quarter of fiscal year 2015 compared to $637.2 million in the prior year period. Organic sales for the quarter declined eleven percent primarily due to decreased production on the C17 program and lower nonrecurring revenue. Operating loss for the third quarter of fiscal year 2015 was ($102.5) million, compared to operating income of $54.0 million for the prior year period, and included a net unfavorable cumulative catchup adjustment on longterm contracts of $2.1 million. Excluding the 7478 program, there was a net favorable cumulative catchup adjustment of $0.9 million. Operating results for the quarter included a onetime $152.0 million pretax charge for forward losses and a $3.0 million unfavorable cumulative catchup adjustment associated with the 7478 program. The forward loss charges reflect anticipated production rate cuts through the duration of the contract, which extends into fiscal year 2019, and revised cost estimates due to higher actual and forecasted costs, including the impact of the new mortality tables on the pension obligations. Also included in operating results were $3.3 million of costs related to the Red Oak facility transition as well as $13.9 million of charges related to lower than expected performance at Triumph Structures International. Excluding these items, the segment s operating margin for the quarter was 16 percent. Aerospace Systems The Aerospace Systems segment reported net sales of $279.2 million in the third quarter of fiscal year 2015 compared to $211.4 million in the prior year period, an increase of thirtytwo percent, reflecting the impact of the Triumph Actuation SystemsYakima and Triumph Actuation SystemsUK and IOM acquisitions completed at the end of the first quarter of fiscal year 2015. Organic sales growth for the quarter was two percent. Operating income for the third quarter of fiscal year 2015 was $41.9 million compared to $32.5 million for the prior year period, an increase of twentynine percent, reflecting an operating margin of fifteen percent. Organic operating margin for the quarter was sixteen percent as compared to fifteen percent for the prior year period. Aftermarket Services The Aftermarket Services segment reported net sales in the third quarter of fiscal year 2015 of $80.7 million compared to $69.6 million in the prior year period, an increase of sixteen percent, reflecting the impact of the Triumph Aviation ServicesNAAS Division acquisition completed early in the third quarter of fiscal year 2015. Organic sales growth for the quarter was seven percent. Operating income for the third quarter of fiscal year 2015 was $12.5 million compared to $9.3 million for the prior year period, an increase of thirtyfour percent, reflecting an operating margin of sixteen percent. Outlook Mr. Frisby continued, We took important steps during the quarter to significantly reduce the risk on the future performance of our 7478 program and to extend our core capabilities to drive growth and value to our shareholders. Completing the transfer of the Gulfstream G650 and G280 wing programs was an
important milestone that enhances our leadership position in that sector. We believe that we are well positioned in our end markets and are committed to leveraging the strength of our portfolio to drive growth. Based on current projected aircraft production rates, the company now expects revenue for fiscal year 2015 to be approximately $3.9 billion and earnings per share for the fourth quarter fiscal 2015 to be approximately $1.70, excluding Red Oak facility transition costs and based on a weighted average share count of 50.6 million shares. The company updated its expectation for Adjusted EBITDA for the fourth quarter fiscal 2015 to be approximately $165.0 million, which excludes the Red Oak facility transition costs, and expects to generate free cash flow available for debt reduction, acquisitions and share repurchases after pension contributions for the fiscal year of approximately $300.0 million. Conference Call Triumph Group will hold a conference call tomorrow, January 29 at 8:30 a.m. (ET) to discuss the fiscal year 2015 third quarter results. The conference call will be available live and archived on the company s website at http://www.triumphgroup.com. A slide presentation will be included with the audio portion of the webcast. An audio replay will be available from January 29 th to February 5 th by calling (888) 266 2081 (Domestic) or (703) 9252533 (International), passcode #1650287. About Triumph Group Triumph Group, Inc., headquartered in Berwyn, Pennsylvania, designs, engineers, manufactures, repairs and overhauls a broad portfolio of aerostructures, aircraft components, accessories, subassemblies and systems. The company serves a broad, worldwide spectrum of the aviation industry, including original equipment manufacturers of commercial, regional, business and military aircraft and aircraft components, as well as commercial and regional airlines and air cargo carriers. More information about Triumph can be found on the company s website at www.triumphgroup.com. Statements in this release which are not historical facts are forwardlooking statements under the provisions of the Private Securities Litigation Reform Act of 1995, including statements of expectations of or assumptions about future aerospace market conditions, aircraft production rates, financial and operational performance, revenue and earnings growth, cash flow, profitability and earnings results for fiscal year 2015. All forwardlooking statements involve risks and uncertainties which could affect the company s actual results and could cause its actual results to differ materially from those expressed in any forward looking statements made by, or on behalf of, the company. Further information regarding the important factors that could cause actual results to differ from projected results can be found in Triumph Group s reports filed with the SEC, including our Annual Report on Form 10K for the fiscal year ended March 31, 2014.
(in thousands, except per share data) Three Months Ended December 31, Nine Months Ended December 31, CONDENSED STATEMENTS OF OPERATIONS 2014 2013 2014 2013 Net sales $ 917,417 $ 915,816 $ 2,808,444 $ 2,826,844 Operating (loss) income (61,266) 84,779 293,956 319,096 Interest expense and other 13,573 30,115 71,320 70,146 Income tax (benefit) expense (35,007) 19,271 66,778 84,998 Net (loss) income $ (39,832) $ 35,393 $ 155,858 $ 163,952 Earnings per share basic: Net (loss) income $ (0.79) $ 0.68 $ 3.05 $ 3.18 Weighted average common shares outstanding basic 50,643 52,024 51,130 51,548 Earnings per share diluted: Net (loss) income $ (0.79) $ 0.67 $ 3.04 $ 3.11 Weighted average common shares outstanding diluted 50,643 52,806 51,343 52,798 Dividends declared and paid per common share $ 0.04 $ 0.04 $ 0.12 $ 0.12
(dollars in thousands, except per share data) BALANCE SHEET Unaudited Audited December 31, March 31, 2014 2014 Assets Cash and cash equivalents $ 34,181 $ 28,998 Accounts receivable, net 448,892 517,304 Inventory, net of unliquidated progress payments of $174,855 and $165,019 1,288,564 1,111,767 Rotable assets 43,825 41,666 Deferred income taxes 49,429 57,308 Prepaid and other current assets 22,789 24,897 Current assets 1,887,680 1,781,940 Property and equipment, net 982,666 931,430 Goodwill 2,133,879 1,791,891 Intangible assets, net 974,028 978,171 Other, net 48,745 69,954 Total assets $ 6,026,998 $ 5,553,386 Liabilities & Stockholders' Equity Current portion of longterm debt $ 40,877 $ 49,575 Accounts payable 308,398 317,334 Accrued expenses 334,135 273,290 Current liabilities 683,410 640,199 Longterm debt, less current portion 1,401,803 1,500,808 Accrued pension and postretirement benefits, noncurrent 410,168 508,524 Deferred income taxes, noncurrent 434,839 385,188 Other noncurrent liabilities 826,326 234,756 Stockholders' Equity: Common stock, $.001 par value, 100,000,000 shares authorized, 50,451,397 and 52,459,020 shares issued 51 52 Capital in excess of par value 850,542 866,281 Treasury stock, at cost, 2,009,523 and 300,000 shares (133,767) (19,134) Accumulated other comprehensive loss (51,730) (18,908) Retained earnings 1,605,356 1,455,620 Total stockholders' equity 2,270,452 2,283,911 Total liabilities and stockholders' equity $ 6,026,998 $ 5,553,386
SEGMENT DATA Three Months Ended December 31, Nine Months Ended December 31, 2014 2013 2014 2013 Net sales: Aerostructures $ 559,465 $ 637,202 $ 1,803,400 $ 1,979,838 Aerospace Systems 279,198 211,402 787,951 636,411 Aftermarket Services 80,690 69,556 222,641 216,880 Elimination of intersegment sales (1,936) (2,344) (5,548) (6,285) $ 917,417 $ 915,816 $ 2,808,444 $ 2,826,844 Operating income (loss): Aerostructures $ (102,461) $ 53,973 $ 40,634 $ 218,784 Aerospace Systems 41,863 32,504 125,430 106,887 Aftermarket Services 12,490 9,297 34,614 30,678 Corporate (13,158) (10,995) 93,278 (37,253) $ (61,266) $ 84,779 $ 293,956 $ 319,096 Depreciation and amortization: Aerostructures $ 24,947 $ 30,207 $ 74,692 $ 83,002 Aerospace Systems 11,363 10,823 32,027 27,911 Aftermarket Services 2,334 1,862 6,137 5,603 Corporate 1,164 1,211 3,517 3,765 $ 39,808 $ 44,103 $ 116,373 $ 120,281 Amortization of acquired contract liabilities: Aerostructures $ (4,411) $ (8,380) $ (14,311) $ (20,135) Aerospace Systems (11,090) (5,878) (25,021) (14,238) $ (15,501) $ (14,258) $ (39,332) $ (34,373) Capital expenditures: Aerostructures $ 15,589 $ 33,662 $ 53,965 $ 132,205 Aerospace Systems 8,301 5,714 24,552 15,989 Aftermarket Services 1,392 2,728 5,425 10,795 Corporate 814 429 1,228 2,808 $ 26,096 $ 42,533 $ 85,170 $ 161,797
NonGAAP Financial Measure Disclosures We prepare and publicly release quarterly unaudited financial statements prepared in accordance with GAAP. In accordance with Securities and Exchange Commission (the SEC ) guidance on Compliance and Disclosure Interpretations, we also disclose and discuss certain nongaap financial measures in our public releases. Currently, the nongaap financial measure that we disclose is Adjusted EBITDA, which is our net income before interest, income taxes, amortization of acquired contract liabilities, curtailments, settlements and early retirement incentives, legal settlements, depreciation and amortization. We disclose Adjusted EBITDA on a consolidated and an operating segment basis in our earnings releases, investor conference calls and filings with the SEC. The nongaap financial measures that we use may not be comparable to similarly titled measures reported by other companies. Also, in the future, we may disclose different nongaap financial measures in order to help our investors more meaningfully evaluate and compare our future results of operations to our previously reported results of operations. We view Adjusted EBITDA as an operating performance measure and as such we believe that the GAAP financial measure most directly comparable to it is net income. In calculating Adjusted EBITDA, we exclude from net income the financial items that we believe should be separately identified to provide additional analysis of the financial components of the daytoday operation of our business. We have outlined below the type and scope of these exclusions and the material limitations on the use of these nongaap financial measures as a result of these exclusions. Adjusted EBITDA is not a measurement of financial performance under GAAP and should not be considered as a measure of liquidity, as an alternative to net income (loss), income from continuing operations, or as an indicator of any other measure of performance derived in accordance with GAAP. Investors and potential investors in our securities should not rely on Adjusted EBITDA as a substitute for any GAAP financial measure, including net income (loss) or income from continuing operations. In addition, we urge investors and potential investors in our securities to carefully review the reconciliation of Adjusted EBITDA to net income set forth below, in our earnings releases and in other filings with the SEC and to carefully review the GAAP financial information included as part of our Quarterly Reports on Form 10Q and our Annual Reports on Form 10K that are filed with the SEC, as well as our quarterly earnings releases, and compare the GAAP financial information with our Adjusted EBITDA. Adjusted EBITDA is used by management to internally measure our operating and management performance and by investors as a supplemental financial measure to evaluate the performance of our business that, when viewed with our GAAP results and the accompanying reconciliation, we believe provides additional information that is useful to gain an understanding of the factors and trends affecting our business. We have spent more than 15 years expanding our product and service capabilities partially through acquisitions of complementary businesses. Due to the expansion of our operations, which included acquisitions, our net income has included significant charges for depreciation and amortization. Adjusted EBITDA excludes these charges and provides meaningful information about the operating performance of our business, apart from charges for depreciation and amortization. We believe the disclosure of Adjusted EBITDA helps investors meaningfully evaluate and compare our performance from quarter to quarter and from year to year. We also believe Adjusted EBITDA is a measure of our ongoing operating performance because the isolation of noncash income and expenses, such as amortization of acquired contract liabilities, depreciation and amortization, and nonoperating items, such as interest and income taxes, provides additional information about our cost structure, and, over time, helps track our operating progress. In addition, investors, securities analysts and others have regularly relied on Adjusted EBITDA to provide a financial measure by which to compare our operating performance against that of other companies in our industry. Set forth below are descriptions of the financial items that have been excluded from our net income to calculate Adjusted EBITDA and the material limitations associated with using this nongaap financial measure as compared to net income: Legal settlements may be useful to investors to consider because they reflect gains or losses from disputes with third parties. We do not believe that these earnings necessarily reflect the current and ongoing cash earnings related to our operations. Curtailments, settlements and early retirement incentives may be useful to investors to consider because it represents the current period impact of the change in defined benefit obligation due to the reduction in future service costs. We do not believe these charges (gains) necessarily reflect the current and ongoing cash earnings related to our operations. Amortization of acquired contract liabilities may be useful for investors to consider because it represents the noncash earnings on the fair value of below market contracts acquired through acquisitions. We do not believe these earnings necessarily reflect the current and ongoing cash earnings related to our operations. Amortization expenses may be useful for investors to consider because it represents the estimated attrition of our acquired customer base and the diminishing value of product rights and licenses. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure. Depreciation may be useful for investors to consider because they generally represent the wear and tear on our property and equipment used in our operations. We do not believe these charges necessarily reflect the current and ongoing cash charges related to our operating cost structure. The amount of interest expense and other we incur may be useful for investors to consider and may result in current cash inflows or outflows. However, we do not consider the amount of interest expense and other to be a representative component of the daytoday operating performance of our business.
NonGAAP Financial Measure Disclosures (continued) Income tax expense may be useful for investors to consider because it generally represents the taxes which may be payable for the period and the change in deferred income taxes during the period and may reduce the amount of funds otherwise available for use in our business. However, we do not consider the amount of income tax expense to be a representative component of the daytoday operating performance of our business. Management compensates for the abovedescribed limitations of using nongaap measures by using a nongaap measure only to supplement our GAAP results and to provide additional information that is useful to gain an understanding of the factors and trends affecting our business. Modified Adjusted EBITDA is included to adjust for the impacts of our recent relocation from our Jefferson Street Facility and our provision for forward losses on our 7478 longterm contract, in order to show the more comparable results period to period. The following table shows our Adjusted EBITDA and Modified Adjusted EBITDA reconciled to our net income for the indicated periods (in thousands): Three Months Ended Nine Months Ended December 31, December 31, 2014 2013 2014 2013 Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): Net (Loss) Income $ (39,832) $ 35,393 $ 155,858 $ 163,952 Addback: Income Tax Expense (35,007) 19,271 66,778 84,998 Interest Expense and Other 13,573 30,115 71,320 70,146 Curtailments, Settlements and Early Retirement Incentives 1,561 1,561 Gain on Legal Settlement, net (134,693) Amortization of Acquired Contract Liabilities (15,501) (14,258) (39,332) (34,373) Depreciation and Amortization 39,808 44,103 116,373 120,281 Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") $ (36,959) $ 116,185 $ 236,304 $ 406,565 7478 forward loss $ 151,992 $ $ 151,992 $ Jefferson Street Move costs 2,124 9,925 14,058 14,198 Modified Adjusted EBITDA $ 117,157 $ 126,110 $ 402,354 $ 420,763 Net Sales $ 917,417 $ 915,816 $ 2,808,444 $ 2,826,844 Adjusted EBITDA Margin 4.1% 12.9% 8.5% 14.6% Modified Adjusted EBITDA Margin 13.0% 14.0% 14.5% 15.1%
NonGAAP Financial Measure Disclosures (continued) Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): Total Three Months Ended December 31, 2014 Segment Data Aerospace Aftermarket Aerostructures Systems Services Corporate / Eliminations Net Loss Addback: Income Tax Expense Interest Expense and Other $ (39,832) (35,007) 13,573 Operating (Loss) Income $ (61,266) $ (102,461) $ 41,863 $ 12,490 $ (13,158) Amortization of Acquired Contract Liabilities (15,501) (4,411) (11,090) Depreciation and Amortization 39,808 24,947 11,363 2,334 1,164 Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") $ (36,959) $ (81,925) $ 42,136 $ 14,824 $ (11,994) 7478 forward loss $ 151,992 $ 151,992 $ $ $ Jefferson Street Move costs 2,124 2,124 Modified Adjusted EBITDA $ 117,157 $ 72,191 $ 42,136 $ 14,824 $ (11,994) Net Sales $ 917,417 $ 559,465 $ 279,198 $ 80,690 $ (1,936) Adjusted EBITDA Margin 4.1% 14.8% 15.7% 18.4% n/a Modified Adjusted EBITDA Margin 13.0% 13.0% 15.7% 18.4% n/a Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): Total Nine Months Ended December 31, 2014 Segment Data Aerostructures Aerospace Systems Aftermarket Services Corporate / Eliminations Net Income Addback: Income Tax Expense Interest Expense and Other $ 155,858 66,778 71,320 Operating Income (Loss) $ 293,956 $ 40,634 $ 125,430 $ 34,614 $ 93,278 Gain on Legal Settlement (134,693) (134,693) Amortization of Acquired Contract Liabilities (39,332) (14,311) (25,021) Depreciation and Amortization 116,373 74,692 32,027 6,137 3,517 Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") $ 236,304 $ 101,015 $ 132,436 $ 40,751 $ (37,898) 7478 forward loss $ 151,992 $ 151,992 $ $ $ Jefferson Street Move costs 14,058 14,058 Modified Adjusted EBITDA $ 402,354 $ 267,065 $ 132,436 $ 40,751 $ (37,898) Net Sales $ 2,808,444 $ 1,803,400 $ 787,951 $ 222,641 $ (5,548) Adjusted EBITDA Margin 8.5% 5.6% 17.4% 18.3% n/a Modified Adjusted EBITDA Margin 14.5% 14.9% 17.4% 18.3% n/a
NonGAAP Financial Measure Disclosures (continued) Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): Total Three Months Ended December 31, 2013 Segment Data Aerostructures Aerospace Systems Aftermarket Services Corporate / Eliminations Net Income Addback: Income Tax Expense Interest Expense and Other $ 35,393 19,271 30,115 Operating Income (Loss) $ 84,779 $ 53,973 $ 32,504 $ 9,297 $ (10,995) Pension Settlement Charge 1,561 1,561 Amortization of Acquired Contract Liabilities (14,258) (8,380) (5,878) Depreciation and Amortization 44,103 30,207 10,823 1,862 1,211 Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") $ 116,185 $ 75,800 $ 37,449 $ 11,159 $ (8,223) Jefferson Street Move costs $ 9,925 $ 9,925 $ $ $ Modified Adjusted EBITDA $ 126,110 $ 85,725 $ 37,449 $ 11,159 $ (8,223) Net Sales $ 915,816 $ 637,202 $ 211,402 $ 69,556 $ (2,344) Adjusted EBITDA Margin 12.9% 12.1% 18.2% 16.0% n/a Modified Adjusted EBITDA Margin 14.0% 13.6% 18.2% 16.0% n/a Adjusted Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA): Total Nine Months Ended December 31, 2013 Segment Data Aerostructures Aerospace Systems Aftermarket Services Corporate / Eliminations Net Income Addback: Income Tax Expense Interest Expense and Other $ 163,952 84,998 70,146 Operating Income (Loss) $ 319,096 $ 218,784 $ 106,887 $ 30,678 $ (37,253) Pension Settlement Charge 1,561 1,561 Amortization of Acquired Contract Liabilities (34,373) (20,135) (14,238) Depreciation and Amortization 120,281 83,002 27,911 5,603 3,765 Adjusted Earnings (Losses) before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA") $ 406,565 $ 281,651 $ 120,560 $ 36,281 $ (31,927) Jefferson Street Move costs $ 14,198 $ 14,198 $ $ $ Modified Adjusted EBITDA $ 420,763 $ 295,849 $ 120,560 $ 36,281 $ (31,927) Net Sales $ 2,826,844 $ 1,979,838 $ 636,411 $ 216,880 $ (6,285) Adjusted EBITDA Margin 14.6% 14.4% 19.4% 16.7% n/a Modified Adjusted EBITDA Margin 15.1% 15.1% 19.4% 16.7% n/a
NonGAAP Financial Measure Disclosures (continued) Adjusted income from continuing operations before income taxes, adjusted income from continuing operations and adjusted income from continuing operations diluted per share, before nonrecurring costs has been provided for consistency and comparability. These measures should not be considered in isolation or as alternatives to income from continuing operations before income taxes, income from continuing operations and income from continuing operations per diluted share presented in accordance with GAAP. The following table reconciles income from continuing operations before income taxes, income from continuing operations and income from continuing operations per diluted share, before nonrecurring costs. Three Months Ended December 31, 2014 Pretax Aftertax Diluted EPS Location on Financial Statements Loss from Continuing Operations GAAP $ (74,839) $ (39,832) $ (0.79) Adjustments: 7478 forward loss 151,992 98,491 1.94 Aerostructures (EAC) ** Structures International 13,919 9,020 0.18 Aerostructures Transaction fees Tulsa Acquisition 3,507 2,273 0.04 Corporate Jefferson Street Move: Disruption 2,124 1,376 0.03 Aerostructures (EAC) ** Accelerated Depreciation 1,174 761 0.01 Aerostructures (EAC) ** Adjusted Income from Continuing Operations nongaap $ 97,877 $ 72,089 $ 1.42 * Nine Months Ended December 31, 2014 Pretax Aftertax Diluted EPS Location on Financial Statements Income from Continuing Operations GAAP $ 222,636 $ 155,858 $ 3.04 Adjustments: Gain on Legal Settlement (134,693) (87,281) (1.70) Corporate Refinancing Costs 22,615 14,655 0.29 Transaction fees Tulsa Acquisition 4,606 2,985 0.06 Corporate 7478 forward loss 151,992 98,491 1.92 Aerostructures (EAC) ** Structures International 13,919 9,020 0.18 Aerostructures Relocation Costs 3,193 2,069 0.04 Aerostructures Jefferson Street Move: Disruption 10,865 7,041 0.14 Aerostructures (EAC) ** Accelerated Depreciation 5,801 3,759 0.07 Aerostructures (EAC) ** Adjusted Income from Continuing Operations nongaap $ 300,934 $ 206,597 $ 4.02 * Difference due to rounding. * * EAC estimated costs at completion with respect to contracts within the scope of Accounting Standards Codification 60535, "RevenueConstructionType and ProductionType Contracts"
NonGAAP Financial Measure Disclosures (continued) Three Months Ended December 31, 2013 Pretax Aftertax Diluted EPS Location on Financial Statements Income from Continuing Operations GAAP $ 54,664 $ 35,393 $ 0.67 Adjustments: Pension settlement charge 1,561 1,008 0.02 Corporate Refinancing fees 11,069 7,151 0.14 Corporate Relocation Costs (including interest) 5,041 3,256 0.06 Aerostructures (Primarily) Jefferson Street Move: Disruption 5,084 3,284 0.06 Aerostructures (EAC) ** Accelerated Depreciation 3,224 2,083 0.04 Aerostructures (EAC) ** Adjusted Income from Continuing Operations nongaap $ 80,643 $ 52,175 $ 0.99 Nine Months Ended December 31, 2013 Pretax Aftertax Diluted EPS Location on Financial Statements Income from Continuing Operations GAAP $ 248,950 $ 163,952 $ 3.11 Adjustments: Pension settlement charge 1,561 1,008 0.02 Corporate Refinancing fees 11,069 7,151 0.14 Corporate Relocation Costs (including interest) 7,786 5,030 0.10 Aerostructures (Primarily) Jefferson Street Move: Disruption 6,913 4,466 0.08 Aerostructures (EAC) ** Accelerated Depreciation 8,033 5,189 0.10 Aerostructures (EAC) ** Adjusted Income from Continuing Operations nongaap $ 284,312 $ 186,796 $ 3.54 * * Difference due to rounding. * * EAC estimated costs at completion with respect to contracts within the scope of Accounting Standards Codification 60535, "Revenue RecognitionConstructionType and ProductionType Contracts"
NonGAAP Financial Measure Disclosures (continued) Cash provided by operations, before pension contributions has been provided for consistency and comparability. We also use free cash flow available for debt reduction as a key factor in planning for and consideration of strategic acquisitions, stock repurchases and the repayment of debt. This measure should not be considered in isolation, as a measure of residual cash flow available for discretionary purposes, or as an alternative to operating results presented in accordance with GAAP. The following table reconciles cash provided by operations, before pension contributions to cash provided by operations, as well as cash provided by operations to free cash flow available for debt reduction. Nine Months Ended December 31, 2014 2013 Cash flow from operations, before pension contributions $ 365,919 $ 79,142 Pension contributions 55,955 45,800 Cash provided by operations 309,964 33,342 Less: Capital expenditures 85,170 161,797 Dividends 6,122 6,246 Free cash flow available for debt reduction, acquisitions and share repurchases $ 218,672 $ (134,701) We use "Net Debt to Capital" as a measure of financial leverage. The following table sets forth the computation of Net Debt to Capital: December 31, March 31, 2014 2014 Calculation of Net Debt Current portion $ 40,877 $ 49,575 Longterm debt 1,401,803 1,500,808 Total debt 1,442,680 1,550,383 Less: Cash 34,181 28,998 Net debt $ 1,408,499 $ 1,521,385 Calculation of Capital Net debt $ 1,408,499 $ 1,521,385 Stockholders' equity 2,270,452 2,283,911 Total capital $ 3,678,951 $ 3,805,296 Percent of net debt to capital 38.3% 40.0% ######